The Metaverse division's loss contrasts with Meta's otherwise successful first quarter.
In the first quarter, Meta faced a hefty $4 billion loss within its Metaverse unit, Reality Labs, while finishing the quarter with an impressive $5.7 billion profit.
This loss follows the staggering losses of Metaverse's division in 2022, which accounted for a whopping $14 billion.
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However, it appears that the losses were calculated, as Meta's CEO, Mark Zuckerberg, claims that Reality Labs is likely to experience more losses throughout 2023. In the report, the man noted:
We continue to expect Reality Labs operating losses to increase year-over-year in 2023.
Despite the ongoing Metaverse-related financial woes, Meta found success in its artificial intelligence (AI) segment. The company's CEO emphasized the positive impact of AI on their apps and business, stating:
Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision.
While AI has been labeled as the company's "single largest investment," Zuckerberg reassured that Meta's Metaverse aspirations are still a top priority.
Addressing concerns about Meta's focus, Zuckerberg said:
A narrative has developed that we’re somehow moving away from focusing on the Metaverse vision, so I just want to say up front that that’s not accurate. We’ve been focusing on both AI and the Metaverse for years now, and we will continue to focus on both.
He further explained that Metaverse technology and AI can complement each other, with Metaverse tech assisting AI and vice versa. For instance, Zuckerberg mentioned that the company's extensive investment in Avatars would be advantageous for AI agents in the Metaverse.
Although the company still has "a lot of foundational work to do" to provide futuristic experiences, Meta's stock jumped by almost 12% after hours following the better-than-expected first-quarter results, according to Nasdaq data.
Despite the Metaverse division's financial setbacks, Meta's first quarter demonstrates that AI and Metaverse technology can coexist and drive the company forward.